09 Aug 2021

Climate Change 2021 – The Physical Science Basis

The UN Intergovernmental Panel on Climate Change’s August 2021 report shows that human activity is unequivocally driving changes to the climate at an unprecedented scale. The science indicates there is still time to limit temperature rises, but only if we act now, and with ambition.

This summary highlights the main points in the report, and what it means for non-executive directors.

What is the report?

The UN Intergovernmental Panel on Climate Change (IPCC) is currently completing its Sixth Assessment Report (AR6). Like previous reports this will inform international climate policy. The first part, Climate Change 2021, explains the physical science behind climate change and its potential impacts.

Approved by 195 UN member states and produced by over 234 scientists from 65 countries, the report analysed over 14,000 scientific studies.

Although the IPCC’s report shows that the world has not yet done enough to avoid serious climate change, UK businesses are well-positioned to take a leading role in tackling the climate crisis.

A later report has since been released in February 2022, called Climate Change 2022: Impacts, Adaptation and Vulnerability. Read our summary for NEDs here.

What does the report say?

It confirms the massive-scale and multifaceted negative impacts of climate change and the clear link between human-caused greenhouse gas emissions and our warming climate. As UN Secretary-General António Guterres stated, the report signals a ‘code red’ for humanity. The world can still mitigate many of the effects of climate change, but this will require drastic and quick climate action in every region and sector.

The IPCC now says that human activity has unequivocally driven changes to the climate that are unprecedented in scale. Its confidence in these findings has increased since previous assessments.

In addition to global warming and sea level rise, these changes are already increasing the frequency and intensity of extreme weather events in every region of the world. In Europe, the findings indicate more severe and frequent heatwaves and rainfall, rising sea levels, and a reduction in glaciers and snow cover. These impacts can be explored using the IPCC’s Regional Fact Sheets or through the Interactive Atlas.

Under all emissions scenarios, temperatures will continue to rise until at least the middle of this century. We can limit this increase to 1.5 or 2 degrees in line with targets set under the Paris Agreement, if the world makes very steep reductions in greenhouse gas emissions now, declining to net zero around 2050. With every increase in temperature, even in small increments, the intensity and frequency of extreme weather grows. Changes in climate will also make natural carbon sinks less effective at drawing carbon from the atmosphere.

While deep reductions in emissions could mitigate or even reverse some aspects of climate change, some are irreversible, particularly those relating to changes in the ocean; sea level, and ice caps. The report also emphasises the need to consider low-likelihood outcomes with large impacts, such as ice sheet collapse and compound extreme weather events when evaluating climate risk.

To limit the effects, humanity must reach and sustain at least net zero CO2 emissions and significantly reduce other greenhouse gas emissions as soon as possible. In addition, carbon removal can help to reach net zero. The report stresses that every tonne of CO2 contributes to global warming, and there is a near-linear relationship between total CO2 emissions and temperature rise. The effects of significant emissions reductions will be visible within 20 years.

What does this mean for non-executive directors?

Although the IPCC’s report shows that the world has not yet done enough to avoid serious climate change, UK businesses are well-positioned to take a leading role in tackling the climate crisis. NEDs should continue to push for ambitious net zero targets, whilst also emphasising the need for their businesses to act now to both reduce emissions and prepare for the increased risks resulting from climate change.

This report addresses broad and far-reaching aspects of climate change, from which businesses can take some key messages for action:

  • There is still time to limit warming, but businesses in all sectors need to act now to reduce emissions as far and fast as possible. Helping your businesses turn their ambitious targets and plans into action is vital to avoid the worst impacts of climate change. Every tonne of emissions avoided is a step in the right direction.
  • Every region of the world will face multiple risks from climate change, which means that every business will be exposed to these risks regardless of location or industry. Furthermore, these impacts mean that businesses with global supply chains will be exposed to even more complex risks. Work with your board to understand the risks these scenarios pose to your business.
  • While businesses should reduce their emissions in line with the most ambitious climate targets, they should also prepare to face the worst impacts of climate change. The assessment highlights the need for effective adaptation and risk-management measures that look at both short-term and long-term climate impacts.
  • Given the IPCC’s role as a key body informing global climate change discussions and action, businesses should expect increased climate action from national and international governments. These policies are likely to benefit businesses that are proactive and progressive in their sustainability policy but pose a risk to businesses that are slow to reduce their emissions.

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